Tuesday, July 07, 2009

The bad news for India is scrawled across the scorching sky. Not a speck of monsoon clouds has been spotted over much of north and northwestern India for weeks, and the meteorological office has confirmed fears that the country will get late and below-normal rains this year. In a nation where 60% of farmland depends on rains, and where farms provide livelihood to more than 60% of the population, the news has triggered widespread panic. Top bureaucrats have been huddled up in meetings to chart out contingency plans to minimize damage to an already-stagnant agriculture sector in an economy which has only just begun to show signs of recovery following the worldwide slump.

No one who hasn't witnessed an Indian summer can imagine the unyielding heat that sucks the earth bone-dry and churns up the fearsome dry wind - the loo - that wilts everything in its path. By mid- to end-June, the monsoon usually covers most of India, bringing down the mercury, soaking the ground and swelling the rivers that are the lifeline of Indian agriculture. The national meteorological department had predicted a normal monsoon earlier this year, but when there was no sign of rain until the middle of June, alarm bells began to ring. Farmers in the southern state of Andhra Pradesh began holding prayers at major temples. Indian media began to report occult rituals such as farmers arranging "weddings" for frogs and women in one Uttar Pradesh village tying themselves to the yoke to plough land in efforts to please the rain gods. Even farmers in irrigated areas that are not completely dependent on the monsoon are worried. "We keep reading in the papers that the level of water in the dams is falling by a foot every day," says Balbir Singh, a farmer in the Jalandhar district of Punjab, which lies in the northern belt considered India's bread basket.

The government now predicts that the late monsoon will still bring 93% of an average year's rain. "We're still hoping the rains will come," says K.R. Koundal, director of research at the New Delhi-based Indian Agricultural Research Institute, the government-run institute for agricultural research, education and extension. But for this to hold true, there will have to be moderate to heavy rains from June through September to make up for the shortfall, and even a 7% gap has economists and agricultural scientists worried. India's long stagnant agriculture sector, which has grown only 2% over the last decade, has already led to much farmer distress. Instances of farmer indebtedness and suicide, already frequent, could go up. Although experts point out that there is no immediate threat to India's food security after last year's bumper crop last year, low yields could make the proposed Food Security Act, new legislation that aims to provide poor families with a legally enforceable right to food, practically difficult to implement. The effects are being felt beyond the farms in urban areas as well, which are reeling under water and power shortages due to declining water levels in reservoirs that provide both water and hydroelectricity. Delhi residents took to the streets on Wednesday, only to be told to use resources "judiciously."

A bad crop year could aggravate India's overall economic slowdown. "If production suffers, the [low] income effect will bring down rural demand, which has been buoyant so far," says Anjan Roy, Adviser for Economic Affairs at the New Delhi-based Federation of Indian Chambers of Commerce and Industry. "This, in turn, will affect industrial production." Inflation in India is deeply influenced by food and food-related items' prices. Wholesale, retail as well as futures prices of food items are rising every day. "If there's runaway inflation, it will altogether throw economic policy haywire," Roy says. "If the Reserve Bank of India resorts to tightening the monetary policy, the industrial sector, which is already under duress, will be badly hit. It will negate the recent fiscal stimuli."

Prime Minister Manmohan Singh has asked officials to monitor the situation closely, and the relevant ministries and state governments are preparing contingency plans, including distributing drought-resistant seeds, encouraging farmers to grow crops that require less water, and even implementing cloud seeding programs to bring on rains. Experts expect tax breaks and price supports in the budget to be announced early next month. Roy of FICCI says the worst may yet be averted. "Last year the agricultural season was good and procurement was higher than normal," he says, "But the government can start taking preparatory steps such as imports of critical food items such as pulses because currently global food prices are low."

Some agriculture experts even see a potential silver lining to the absentee clouds. They hope the truant monsoon will jolt India's bureaucracy into action to implement much-needed and long-delayed agricultural reforms, as well as improve India's water resources management. Steps should be initiated to link the farmers to the market and improve farm and post-harvest infrastructure, and provide a favorable tax regime for the agriculture and related sectors. The wasteful subsidy regime also needs to be overhauled. Fertilizer subsidies mostly benefit rich farmers and lead to gross overuse. "Subsidized electricity for farmers encourages excessive use, both of electricity and groundwater. And because it is mostly generated from coal, it results in a large amount of CO2 emissions," says Gerald C. Nelson, Senior Research Fellow at the International Food Policy Research Institute based in Washington D.C. Dr Rajeswari S. Raina, senior fellow at the Centre for Policy Research in New Delhi, adds that India needs a coherent policy on rainfed agriculture. "The national agriculture policy talks exclusively about irrigated agriculture despite 60% of Indian farms being entirely dependent on rains," she says.

Although no one in India is explicitly blaming the late monsoon on global warming, a Purdue University study released earlier this year said climate change could influence monsoon dynamics by reducing summer precipitation, delaying the onset of rains and causing longer gaps between rainy periods. "We need to accept now that climate change is something that is bound to happen," says Dr Vibha Dhawan, Director, Bioresources and Biotechnology at The Energy and Resources Institute in New Delhi. "Not just high temperatures but fluctuating temperatures. Not just drought but also floods." We already have such varieties but we've forgotten about them during the last 40-50 years of high-input agriculture. She says better crops need to be re-discovered and developed through traditional methods as well as new technologies such as genetically modified seeds. "And we need to build a buffer stock of such seeds," she adds. If India hopes to get back and stay on a high-growth trajectory, it cannot afford to leave its fate at the mercy of the skies.

A powerful cyclone tore across parts of coastal Bangladesh and eastern India on May 25, triggering tidal surges and flooding that killed at least 275 people and left millions marooned by floodwater or forced to take refuge in shelters.

Flood waters have inundated scores of villages in India's northeast, leaving nearly 500,000 people homeless, an official said Monday.

At least one person has died in the floods, a 55-year-old man who drowned when his boat capsized in Assam state, said Mantu Thakuria, a police officer. It was the first death reported in the state since the rains began last Wednesday.

Nearly 500,000 people have been displaced by the floods, which have affected 10 of the state's 27 districts, Assam's Revenue Minister Bhumidhar Barman told The Associated Press. They include nearly 100,000 people marooned on Majuli island in the Brahmaputra River.

On Sunday, the overflowing river washed away five villages, forcing nearly 4,000 residents to flee to makeshift relief camps, said Barman. The area is nearly 80 miles (130 kilometres) east of Gauhati, the capital of Assam.

Last week, the Brahmaputra breached a 328-foot (100-meter) stretch of a newly built embankment. At least 300 villages in Lakhimpur district, about 220 miles (350 kilometres) north of Gauhati, have been inundated.

The monsoon rains usually hit India from June to September. Assam, a state of 26 million people, suffers flooding almost every year. Last year, millions of people were forced to temporarily abandon their homes.

An El Nino, which means "little boy" in Spanish, is driven by an abnormal warming of the eastern Pacific Ocean, and creates havoc in weather patterns across the Asia-Pacific region.

The Southern Oscillation Index (SOI), a key factor in identifying an El Nino that is calculated from monthly and seasonal fluctuations in air pressure between Tahiti and Darwin, eased in June to negative 2 from a negative 5 in May, the bureau said on Tuesday.

A sustained negative SOI often indicates El Nino, a condition that can bring drought conditions to Australia's farmlands, weaken the Asian monsoon critical for Indian crops, stir up storms in the Gulf of Mexico and cause flooding in Latin America.

"Minus 10 is an often used threshold level and it just got to there a few times, but it hasn't been sustained at that level," Sam Cleland, author of the Bureau of Meterology's weekly Tropical Climate Note, said on Tuesday.

"I don't think we'd make the call just yet that we have an El Nino event in place," he said ahead of the bureau's El Nino update on Wednesday.

Its last report said an El Nino was very likely in 2009 and may be declared in coming weeks. The last El Nino was in 2006.

David Palmer, a meteorologist at private forecasting firm the Weather Company says indicators suggest there is a 60 percent chance of an El Nino developing in August, the month when it usually can be determined whether the weather pattern exists.

"We've been suggesting for some time now that there is an El Nino developing but it is not until August that you can say that for sure," said Palmer.

"If I were a betting man I would be putting my money on it."

But Cleland said the Pacific trade winds, another key El Nino factor, had also weakened in June.

"The equatorial Pacific Ocean continues to develop into a more El Nino like pattern," said Cleland, manager of climate services at the bureau's Darwin office.

"To call an El Nino or not is difficult and it takes a number of parameters over a sustained period. The formal definition of an El Nino often occurs in hindsight," he said.

The last severe El Nino in 1998 killed more than 2,000 people and caused billions of dollars in damages to crops, infrastructure and mines in Australia and Asia. It came in the middle of the Asian crisis that roiled financial markets.

India, one of the world's biggest producers and consumers of everything from sugar to soybeans, is already experiencing a weaker annual monsoon. Its faltering sugar crop has helped drive world prices of the commodity to their highest in three years.

India's monsoon will remain weak according to the latest Madden-Julian Oscillation (MJO) index, which gauges the eastward progress of tropical rain, Cleland said. It was too early to get a read on the potential intensity of a new El Nino, he added.

"There's no strong indication at this stage of what level of impact this ENSO event could have," he said, adding that some weak El Ninos have had severe impacts on Australia rainfall, while stronger El Ninos have only had marginal impacts.